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Overview

Madagascar is the world’s fifth-largest island, situated in the Indian Ocean off the coast of southern Africa. The country is endowed with considerable natural resources and unparalleled biodiversity. However, its population, estimated at 30.3 million in 2023, faces the challenge of a persistently high poverty rate (80.7% in 2023, $2.15 per person per day).

Political Context
Andry Rajoelina was re-elected as President of the Republic of Madagascar in December 2023 following the first round of presidential elections on November 16, 2023. He reappointed Christian Ntsay as Prime Minister. After the legislative elections in Madagascar on May 29, 2024, the presidential party secured an absolute majority in the National Assembly. Out of 163 deputies elected, 84 belong to the presidential platform. Following the legislative elections, a new cabinet was formed, consisting of 27 ministers and two secretaries of state, with 12 women among them.

Economic Situation
Economic growth is expected to strengthen and rise to 4.5% in 2024 from 3.8% in 2023, driven by agriculture, mining, manufacturing—textiles in particular—and telecommunications. The tourism sector continues its post-pandemic recovery, with tourist arrivals between January and July 2024 reaching 88% of 2019 levels. Agricultural output has seen notable improvements, contributing to overall growth. Looking ahead, growth is expected to remain robust, supported by increased private investment, structural reforms, particularly in mining and digital sectors, and an enhanced investment climate.

Inflation moderated to 7.6% in July 2024 from its peak of 12.4% in March 2023, due to higher agricultural output and tighter monetary policy. The central bank raised its policy rates in August 2024 in response to persistent inflationary pressures. Despite a slight increase in non-performing loans to 7.9% in early 2024, the banking sector remains both profitable and liquid. The current account deficit widened to 3.5% of GDP in the first half of 2024, primarily due to lower export volumes and prices for several major exports (nickel, cobalt, and cloves). However, external financing has helped maintain international reserves at 5.7 months of imports. The public debt rose to 55.6% of GDP in 2023, and a revised budget in June 2024 adjusted down expenditure and revenue forecasts while increasing transfers to the energy sector.

Growth is projected to average 4.6% over 2024-26, supported by increased private investment, structural reforms, and improved infrastructure, particularly in the energy sector. Inflation is expected to moderate further with continued monetary tightening and better policy implementation. The current account deficit is forecast to stabilize at 6.1% of GDP over the medium term, with adequate reserves and rising exports. The fiscal deficit is projected to stabilize at around 3.9% of GDP, with public debt expected to remain stable at 55.9% of GDP over the medium term. Continued reform efforts, particularly in public utilities and revenue collection, will be critical to sustaining fiscal and macroeconomic stability. However, downside risks remain, including the weak financial performance of state-owned enterprises, frequent power outages, and vulnerability to external shocks such as commodity price fluctuations and adverse weather.

Last Updated: Oct 03, 2024

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Additional Resources

Country Office Contacts

Main Office Contact
1 Rue Andriamifidy
BP 4140
Antananarivo 101, Madagascar
+261-20-22-560-00
For general information and inquiries
Diana Styvanley
External Affairs Officer
+261-20-22-560-00
For project-related issues and complaints